SAUDI ARABIA is making significant advancements in clean energy transition space; with multiple projeects being developed under PPP route or thriugh JVs with SPPC in the country. There is good interest in other infrastructure sectors such as urban infra, transport (especially EV charging infra) etc. as well as a strong emphasis on local capacity building & technical enhancement within the country.
Read the key developments in Infrastructure and PPPs in Saudi Arabia in our Q3 2024 insight.
JULY 2024
SPPC SIGNS 5.5 GW SOLAR POWER DEALS IN SAUDI ARABIA
The Saudi Power Procurement Company (SPPC) has inked power purchase agreements (PPAs) for three solar photovoltaic (PV) projects totalling 5.5 GW in Saudi Arabia. The agreements were signed with a consortium of ACWA Power, Badeel, and Aramco Power. These projects include Haden Solar PV and Al-Muwaih Solar PV, each with a capacity of 2000 MW and located in Makkah Province, as well as Al-Khushaybi PV in Qassim Province, which has a capacity of 1500 MW.
Furthermore, the Haden Solar PV project offers a levelised cost of electricity (LCOE) of 1.58762 cents/kWh, while the LCOE for Al-Muwaih Solar PV is 1.60852 cents/kWh. Al-Khushaybi PV has a LCOE of 1.67289 cents/kWh. The goal is to achieve between 100GW and 130GW by 2030, contingent on the growth of electricity demand.
PIF STRENGTHENS RENEWABLE ENERGY LOCALIZATION IN SAUDI ARABIA WITH THREE NEW JVs
Public Investment Fund (PIF) has announced the signing of three new agreements to localize in Saudi Arabia the manufacturing and assembly of equipment and components needed for solar and wind power in Saudi Arabia. These agreements have been entered into by the Renewable Energy Localization Company (RELC) – a fully owned PIF company. They are in line with the Saudi Ministry of Energy’s drive to localize the production of renewable energy components.
The three joint ventures (JVs) represent the latest in a series of investments by PIF in the utilities and renewables sector to support Saudi Arabia’s energy needs and consolidate its position in the field of clean power.
The first agreement involves a JV with the wind power technology company Envision Energy and the Saudi firm Vision Industries. It will involve the manufacture and assembly of wind turbine components including blades with an estimated annual generation capacity of 4 gigawatts (GW). Under this agreement, RELC will hold 40 % of the JV, with Envision holding 50 % and Vision Industries holding 10 %.
The second JV features the manufacturer Jinko Solar, which supplies photovoltaic energy technologies, and Vision Industries. This JV entails localizing the manufacture of photovoltaic cells and modules for high-efficiency solar generation. Under the agreement, which envisages annual production of 10 gigawatts (GW) generation capacity, RELC will hold 40 % of the JV, with Jinko Solar holding 40 % and Vision Industries holding 20 %.
The third JV is with Lumetech S.A. Pte. Ltd, a subsidiary of TCL Zhonghuan Renewable Energy, along with Vision Industries. This deal will localize the production of solar photovoltaic ingots and wafers with annual production sufficient to generate 20 GW of power. Under this agreement, RELC will hold 40 % of the JV, with Lumetech holding 40% and Vision Industries having 20 %.
These agreements will enable the localization of advanced power generation and manufacturing technologies for renewable energy production in Saudi Arabia as well as maximize local content, to help meet growing domestic, regional, and international demand. The agreements will enhance the ability of local manufacturing to benefit from the global energy transition and will support PIF’s efforts to consolidate Saudi Arabia’s position as a global centre for exporting products and services for the renewables sector.
The involvement of Vision Industries, a leading investor and developer of clean energy industrial projects and local supply chains, alongside these three Chinese companies reflects PIF’s continuous efforts in attracting international investors while further enabling the Saudi private sector.
PRIVATE-PUBLIC PARTNERSHIPS DRIVING INVESTMENT IN SAUDI ARABIA’S BOOMING REAL ESTATE MARKET
Private-Public Partnerships (PPPs) have become a cornerstone for attracting substantial investment to Saudi Arabia’s real estate market over the past five years. Saudi Arabia’s drive to bolster the private sector and foster sustainable partnerships for development, the role of PPPs in spurring economic growth and innovation is now more critical than ever, delegates at the 15th Real Estate Development Summit Saudi Arabia.
More than 120 international firms received licenses to relocate their regional headquarters to Saudi Arabia during the first quarter of 2024, representing a 477 % year-on-year increase. Saudi Arabia’s real estate sector is poised for substantial growth, with projections reaching USD 69.51 Bn in 2024 and anticipated to surge to USD 101.62 Bn by 2029. This expansion aligns closely with the Kingdom’s Vision 2030, focusing prominently on housing, tourism, and commercial development.
SUNGROW TO SUPPLY 7.8 GWH OF BATTERIES IN SAUDI ARABIA
Chinese photovoltaic (PV) inverter and energy storage system provider Sungrow Power Supply Co Ltd has agreed with Saudi Arabia's Algihaz Holding to supply up to 7.8 GWh of battery energy storage (BESS) systems for a project in the Kingdom. The batteries, utilizing Sungrow's PowerTitan 2.0 technology, will be deployed in Najran, Madaya, and Khamis Mushait.
The project will significantly enhance the stability and reliability of Saudi Arabia's power grid while advancing the goals under the Kingdom's Vision 2030 strategy. The announcement comes amid Saudi Arabia's significant efforts to expand solar energy as it seeks to boost renewables to 50 % of the power mix by the end of this decade.
AUGUST 2024
EGYPT AND SAUDI ARABIA ACCELERATE USD 1.8 BN ELECTRICITY INTERCONNECTOR PROJECT
Egypt’s Minister of Electricity and Renewable Energy reaffirmed his commitment to completing the USD 1.8 Bn Saudi-Egypt electricity interconnector project by early summer 2024, with full operations expected by early 2026. Intensive meetings have been held with stakeholders and authorities to accelerate project implementation, address challenges in remote areas, and ensure the timely completion of technical work related to tower heights, submarine cables, and other critical infrastructure.
The project is expected to facilitate the exchange of 3,000 megawatts, contributing to network stability, enhancing the electricity supply between Egypt and Saudi Arabia, and serving as a cornerstone for future Arab interconnection initiatives. The project, which will be implemented in two phases, is set to create new opportunities for both Egypt and Saudi Arabia. The first phase is slated to commence in July 2025, with full operation expected by early 2026 at an estimated cost of USD 1.8 Bn.
The meetings also focused on collaboration among all parties to enhance resources and expedite the completion of technical work, particularly concerning tower heights near airports, oil pipelines, the Suez Canal, and other critical locations along the interconnector’s path. This project is one of the key factors in ensuring network stability without the need for additional fuel to operate power plants, allowing for reserve capacity during peak demand.
SAUDI ARABIA INVITES RFQS FOR SEWAGE PPPs
Authorities in Saudi Arabia have issued the request for qualification for the second phase of the country’s sewage treatment plant (STP) Public Private Partnership (PPP) program. The National Water Company (NWC) issued the Request for Quotation (RFQ) documents for the build-operate-transfer scheme, involving the long-term operation and maintenance (LTOM) of 118 STPs across the country.
Pre-qualified bidders will be eligible to bid for all 10 contracts, which could include requirements to fund the rehabilitation, energy efficiency improvements, enhanced sludge treatment facilities, and treatment capacity upgrades. Bidders awarded contracts in the first phase, involving eight STP bundles with a total treatment capacity of 4.1 Mn cubic meters per day, including Spanish water company Aguas de Valencia and Saudi water specialist Alkhorayef. Tenders for the first phase are still ongoing for STPs in Heet and Al-Hayer in Riyadh as well as in the cities of Dammam, Khobar, and Al-Ahsa.
SAUDI ARABIA IS BUILDING WORLD'S LARGEST SOLAR-STORAGE MICROGRID
Saudi Arabia is building a 400-MW solar microgrid backed by 1.3 GWh of energy storage capacity to ensure clean energy supply for the Red Sea Project on the west coast of the Kingdom. Located in a 28,000-sq-km area in Tabuk province between the cities of Umluj and Al-Wajh, the project is being developed by Red Sea Global, a company owned by Saudi Arabia's Public Investment Fund (PIF).
The destination is poised to be the world’s first fully clean energy-powered destination. The Red Sea City is projected to feature 50 hotels with 8,000 rooms and over 1,000 residential properties spread across 22 islands and six inland locations. All facilities will be powered with off-grid renewable energy. The city is designed to accommodate up to one million visitors annually.
SAUDI’S RIYADH MUNICIPALITY LAUNCHES PHASE 1 OF RIYADH PARKING PPP PROJECT
Riyadh Municipality has launched the first phase of the Riyadh Parking Public-Private Partnership (PPP) project to reduce unauthorized parking and enhance the urban landscape of the Saudi capital. The project covers 24,000 parking spaces in public and commercial streets and more than 140,000 managed parking spaces in various residential neighbourhoods. The phase will cover 12 areas across the Al-Wurud, Ar Rahmaniyyah, West Olaya, Al-Murooj, King Fahd, and Al-Sulaimaniyah districts, in addition to four other areas in the southern neighborhoods of Riyadh.
The project also aims to use the latest digital technologies to oversee and regulate the usage of parking spaces in Riyadh. The parking project is part of an overall strategy that includes the development of infrastructure for public parking, improvements to sidewalks, and the provision of pedestrian pathways.
SEPTEMBER 2024
ACWA POWER SECURES USD 2.6 BN FOR 5.5 GW OF SOLAR IN SAUDI ARABIA
ACWA Power has landed SAR 9.7 Bn (USD 2.6 Bn) from a consortium of local, regional and international banks for the development, construction and operation of three solar plants in Saudi Arabia. It will build three facilities in Makkah and Qassim with capacities of 2 GW, 2 GW, and 1.5 GW. Buraiq Renewable Energy Co., Moya Renewable Energy Co., and Nabah Renewable Energy Co. have signed the financing agreements. ACWA Power holds a 35.1 % stake in each company, while Badeel, a wholly owned subsidiary of Saudi Arabia's Public Investment Fund, owns 34.9 %. Saudi Aramco Power Co. holds the remainder.
The financing involves banks such as Banque Saudi Fransi, Emirates NBD, First Abu Dhabi Bank, HSBC, Mizuho Bank, Riyad Bank, Saudi National Bank, and Standard Chartered Bank. The agreements cover approximately 27.3 years, with ACWA Power's guarantee limited to the bridge loan and reserve capital. Saudi Arabia’s solar capacity stood at 2,285 MW at the end of 2023. The country aims to source at least half of its electricity from renewable sources by the end of the decade.
ABU DHABI INAUGRATES THREE SCHOOLS WITH CAPACITY FOR 5,360 STUDENTS LAUNCHED IN ZAYED CITY
The Abu Dhabi Investment Office (ADIO), in collaboration with the Abu Dhabi Department of Education and Knowledge (ADEK) and a multinational consortium led by Plenary Group and BESIX Group, has inaugurated three state-of-the-art schools in Abu Dhabi’s Zayed City. The newly inaugurated educational facilities represent the first time that school infrastructure has been developed in the UAE under a Public-Private Partnership (PPP) model.
The project has significantly enhanced Abu Dhabi’s educational landscape by ensuring additional capacity for 5,360 students, from kindergarten to Grade 12, for the 2024-2025 academic year and beyond. ADEK played a pivotal role in ensuring that the project met the highest standards of design, material, and equipment selection. As the first educational facilities delivered through ADIO’s PPP procurement framework, the Zayed City Schools project aims to elevate the standard of educational facilities in the Emirate and serve as a model for increased private sector participation in the delivery and financing of public infrastructure across Abu Dhabi.
The three new schools, located within Abu Dhabi’s Zayed City, span a combined area of 81,000 square meters. The successful completion of the Zayed City Schools underscores ADIO’s commitment to expanding its PPP programme and serves as a testament to Abu Dhabi’s innovative approach to infrastructure development. This initiative aims to increase private sector participation and foreign direct investment, enhance accountability and efficiency in public asset management, develop long-term collaborations between government and private entities, and provide investors with access to lucrative concessions.
VOLT CHARGE TO BOOST SAUDI EV INFRASTRUCTURE WITH NEXT-GEN MOBILE CHARGERS
Saudi Arabia is set to advance its electric vehicle infrastructure with the introduction of next-generation mobile EV chargers by local manufacturer Volt Charge. The EV Auto Show in Riyadh that the firm is finalizing the prototype of its innovative mobile charger, in collaboration with its sister company QSS AI & Robotics.
This comes as robust charging infrastructure is essential to Saudi Arabia’s plan to transition 30 % of vehicles in Riyadh to electric by 2030, a crucial step in its broader strategy to cut city emissions by 50 % and achieve carbon neutrality by 2060. The company is the first Saudi brand to manufacture entirely within the Kingdom, with a 7,000 sq. meters factory in Sudair City, a sizable facility for assembling or producing the chargers. The challenges faced in producing the EV chargers, particularly in procuring the necessary components.
Volt Charge, headquartered in Riyadh, specializes in manufacturing robust EV chargers designed for extreme climates. The company’s efforts were showcased at the Riyadh International Convention and Exhibition Center, highlighting Saudi Arabia’s commitment to sustainable mobility as part of Vision 2030. The EV Auto Show serves as a key platform for discussing the future of mobility, featuring interactive seminars, panel discussions, and showcases of EV technologies and charging solutions.
List of key transaction- Saudi Arabia Q3 2024
Source: YOG INFRA, Public Information
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